Maryland group proposes dime a drink tax to fund programs for the needy

Before you go, we thought you'd like these...
Before you go close icon
MartiniWhen the recession threatens our peace of mind, many of us turn to alcohol for relief. However, that beer, glass of wine or mixed drink can vary in cost a great deal, based on what state you live in and its alcohol tax rate. An advocacy group in Maryland now is proposing a dime per drink tax on alcohol sales in that state as a way to fund programs for the poor and disabled.

The group, Maryland Citizens' Health Initiative, started lobbying state legislators a few weeks ago. Such a tax has been shot down as recently as 2008, and the tax rate on alcohol in the state has not changed in almost 30 years. The group hopes this tax will raise almost a quarter of a billion dollars that could be used to fund programs to help alcohol and drug addicts as well as others dependent on state health programs.Maryland has the dubious distinction of charging one of the the lowest tax rates on distilled spirits, only $1.50 per gallon. Compare this with the five most pricey states:
  • Washington $26.45 per gallon
  • Oregon $24.63
  • Virginia $20.13
  • Alabama $18.78
  • North Carolina $13.39
New Hampshire and Wyoming effectively charge no tax. Other states that charge less than $3 a gallon tax on liquor are Missouri, Colorado, Texas, Kansas, Louisiana, North Dakota, Arkansas and Indiana.

Maryland is not the lowest in taxes on table wine. At $0.40 per gallon, it is undersold by Louisiana, California, Texas, Wisconsin, Colorado, the District of Columbia, Kansas, Minnesota, New York and Ohio. The most heavily taxed wine sales? Alaska ($2.50 per gallon), North Carolina, Florida, Iowa and New Mexico.

Beer drinkers should get a kick out of Wyoming, where the tax on a gallon of beer is less than 2 cents. Other bargain states include Wisconsin, Missouri, Colorado and Pennsylvania. Maryland currently only charges 9 cents per gallon on beer.

Compare that to Alaska ($1.07), North Carolina ($0.9971), Hawaii ($0.93), South Carolina ($0.77) and Florida ($0.48).

The group proposing this tax increase also claims that this dime increase could cut down on alcohol dependence significantly. With that in mind, note alcohol-related highway fatalities per 100,000 population, in 2008:

High-tax states, distilled spirits
  • Washington 2.8
  • Oregon 3.6
  • Virginia 3.8
  • Alabama 6.8
  • North Carolina 4.6
Low-tax states
  • Maryland 2.7
  • Missouri 5.2
  • Colorado 3.5
  • Texas 5.2
  • Kansas 5.2
There are a myriad of different ways to tax spirits, and the Tax Foundation does a great job of laying them out. I recommend perusing its website if you're interested in a more nuanced price comparison.
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners